Ola Electric stock slumps 10% to its lowest level since listing amid spat between CEO Bhavish Aggarwal and Kunal Kamra

It appears that the decline in Ola Electric Mobility shares is not yet over, as they continued their downward trend in Monday's trading session. The stock fell below the ₹90 mark for the first time since its listing, reaching a low of ₹89.55 per share—a significant drop of 9.6% over its last close.

This decrease resulted in a 43% correction from the all-time high of ₹157.40 that the stock hit in mid-August.

The fall comes amid a war of words between Ola CEO Bhavish Aggarwal and comedian Kunal Kamra on X, which revolved around the service issues regarding the Ola Electric scooters.

The controversy started when Kamra shared a photo of several Ola electric scooters seemingly waiting for service, criticising the company's after-sales services.

“Do indian consumers have a voice? Do they deserve this? Two wheelers are many daily wage workers lifeline…” Kamra wrote on X while tagging the Minister for Road Transport and Highways, Nitin Gadkari, asking “is this how Indians will get to using EV’s?”

In response, OLA CEO Bhavish Aggarwal slammed the comedian and said if Kamra was so concerned about the scooters, he would be happy to pay him to come and help the company, and if not, the Ola CEO urged Kamra to "shut up" and let Ola fix the "real customer issues".

However, many X users and customers disliked Aggarwal's tone, and called out the company's founder-CEO Bhavish Aggarwal for his “rude… arrogant… ignorant…” responses.

The company’s customers have been facing major issues with faulty hardware and software glitches in their vehicles. As a result, the company’s service centres are overwhelmed with a large number of scooters needing repairs.

Last month, a 26-year-old man was arrested for allegedly setting fire to an Ola showroom in Karnataka over unsatisfactory servicing of a recently purchased e-scooter.

Apart from this, a steady decline in the company’s market share in the electric vehicle segment is also weighing on the stock.

Steady drop in sales 

In September, the company reported its lowest monthly sales of the year, with just 23,965 vehicles sold. This marked a month-on-month (MoM) decline for the second consecutive month, following a drop to 26,928 units in August.

Analysts attribute the company's shrinking lead in the market to competitors launching new models at price points similar to Ola's offerings, as well as the company's service network struggles, which have resulted in an accumulation of unsold scooters.

Throughout the first seven months of CY2024, the market leader averaged monthly sales of 37,695 units. However, sales began to decline in August and continued into September. This trend has significantly slowed the company’s year-on-year growth, which dropped from 105% in June and 112% in July to 46% in August and 29% in September.

In September, Bajaj Auto moved up to the second spot in electric two-wheeler sales, selling 18,933 Bajaj Chetaks, and surpassed the TVS iQubes.

The ongoing decrease in sales has also affected Ola's market share, which fell to 27% in September, down from 31% in August. It had a market share of 38% in March and July 2024. 

Earlier, domestic brokerage firm Ambit Capital highlighted that the electric vehicle (EV) market in India is still in its nascent stages, and the increasing competition could put pressure on Ola Electric’s market share.

Ambit predicts that Ola's market share will decrease from 35% in FY24 to 27.5% by FY29 and further down to 25% by FY31.

Despite these challenges, Ola became the first Indian electric vehicle manufacturer to exceed 300,000-unit sales in a calendar year.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.